Venezuela's Chavez revels in convincing election win

October 08, 2012|Todd Benson and Helen Murphy | Reuters

(JORGE SILVA, REUTERS)

CARACAS (Reuters) - Venezuelan President Hugo Chavez pledged to deepen his socialist revolution after a comfortable election victory that could extend his divisive leadership of the OPEC nation to two decades.

The new six-year term clears the way for Chavez, who is recovering from cancer, to consolidate state control over Venezuela's economy, possibly with more nationalizations, and continue his support for left-wing allies in Latin America and around the world.

The victory also cements his status as a towering figure in modern Latin American history and an icon of the political left. But the slimmer margin of victory - 10 percentage points, down from 25 points in 2006 - reflected growing frustration among Venezuelans at day-to-day problems such as rampant crime and blackouts, which Chavez will be under pressure to tackle.

Tens of thousands of ecstatic supporters celebrated in the streets around the presidential palace overnight, pumping fists in the air after the former soldier was re-elected with 1.5 million more votes than younger rival Henrique Capriles.

"Venezuela will continue along the path of democratic and Bolivarian socialism of the 21st century," Chavez, 58, thundered from the palace balcony, holding up a replica of the sword of independence hero Simon Bolivar.

It was an extraordinary victory for a leader who just a few months ago feared for his life as he struggled to recover from cancer. Turnout was a record 80 percent of registered voters, boosting Chavez's democratic credentials despite critics' depiction of him as an autocrat who tramples on private enterprise and silences political foes.

In a nod to the opposition's strong showing, Chavez promised in his victory speech to be a "better president." On Monday, he said on his Twitter account that he had a "pleasant conversation" with Capriles and called on Venezuelans of all political stripes to unite.

The conciliatory tone marked a stark contrast to Chavez on the campaign trail, when he never publicly named Capriles and repeatedly disparaged his challenger as a "pig" and a "right-wing oligarch" who would govern only for the rich.

That message resonated with poor voters, with whom Chavez has cultivated a remarkable bond over the years by funneling record oil revenues to social programs.

Chavez's victory pushed Venezuelan bond prices slightly lower on Monday in thin trading as some investors unwound bets that Capriles would win. Despite Chavez's anti-capitalist rhetoric, Venezuelan bonds are among the most-traded emerging market debt on Wall Street because they offer high yields.

ALL EYES ON CHAVEZ

A retired lieutenant colonel who first won fame with a failed 1992 coup, Chavez has become Latin America's main anti-U.S. agitator, criticizing Washington while getting close to its adversaries, including Syria and Iran.

A decade-long oil boom has allowed him to fund ideological allies from Bolivia to Cuba, where Chavez's victory was met with relief. Cuban leader Raul Castro was among the first foreign leaders to congratulate Chavez, calling the vote a resounding endorsement of the Venezuelan leader's "Bolivarian Revolution."

Chavez sends discounted oil to more than a dozen Central and South American countries. Communist-led Cuba, for example, receives more than 100,000 barrels a day of Venezuelan crude.

Venezuela is often repaid for the oil in services - Cuba sends doctors to Venezuelan slums, others pay in food and livestock - putting strain on the finances of state oil company PDVSA, which is already struggling to meet output targets.

With the election over, all eyes are on what Chavez will do next. After his landslide win in 2006, he ordered takeovers in the telecommunications, electricity and oil sectors. Some worry he could now extend nationalizations to other corners of the economy, including the banking, food and health industries.

Any recurrence of the pelvic cancer that has already forced him to undergo three operations in Havana since June 2011 could derail his plans.

The constitution states that if an incumbent steps down in the first four years of a six-year term, a new vote would be called - meaning that under such a scenario Capriles or another opposition candidate would have another crack at power.

Opposition leaders were crushed by the loss. After a tireless campaign that generated widespread euphoria among anti-Chavez voters and saw Capriles narrow the gap in polls, the opposition was hoping to finally unseat their nemesis.

Capriles, a 40-year-old state governor, bared his soul on Monday in a flurry of emotional Twitter messages, and urged his followers not to give up.

"I know a lot of people are sad, but we need to bounce back and keep believing that we can and will build a better country," he said.